Penny Foolish and Pound Stupid

Hey, do you have a few bucks in an account?  Stashed under a mattress?  Maybe a nice little savings account not linked to the check card you’ve worn out three times in the last year?  Congratulations, you’re ahead of the person to the right, left, and behind you…

Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.

“It’s disappointing,” said Greg McBride, Bankrate.com’s senior financial analyst. “Nothing helps you sleep better at night than knowing you have money tucked away for unplanned expenses.”

Really?  I know I harp on this one occasionally, and I’ll get the comeback along the lines of: “Yea, you’re an engineer, and you have a high-paying job.”  Well, first, I chose a career field that I felt would support me over time.  I’ve worked my butt off to stay employed and get ahead.  So yea, I’ll take it as a compliment that my hard work paid off, and that I have savings (over six months, by the way).

Not all that long ago (updated: it was almost two decades, reminds the wife… but since it was young in our marriage, it seems like yesterday), the wife and I were making slightly below the average household income for the area in which we lived.  (For reference, the California Bay Area is not a place to live if you like to be wealthy in comparison to your peers.)  We were at some friends’ house for dinner, admiring their horse property, the nice truck, and all the other trimmings.  One of us mentioned that we’d managed to pay off our little new Subaru in one year, and they were shocked.  The truck, apparently, was on a lease that was over half our rent…  and these two made easily 4x what we were at the time.

Saving money is as hard a job as the one you use to get your income.  Getting ahead of the game for the lovely wife and me involves a lot of conversation (sometimes at volume with feeling), and shared sacrifice that brings us (eventually) closer together.  I can’t encourage you enough to give first, save second, and spend fifteenth.  It might be painful in the short term when everyone else has cool stuff, but it pays off when you can look at the options around you and they’re all pretty darn good, even in an emergency.

Minor updates based on a conversation with my lovely wife…